Posts Tagged ‘Performance Rights Act’

The Performance Rights Act (PRA) has been a frequent topic here on the Radio 2020 blog ever since its inception, and with good reason. The legislation as it stands could have massive negative repercussions for the radio industry at all levels. Among other things, the new royalty structure will almost certainly result in the labels revisiting their contracts with artists if it passes — not something many have considered. This is only one of many ramifications that will rear their ugly heads if the PRA gets passed.

Let’s take a quick trip in a time machine and revisit my prior postings on the subject. For the benefit of our readers, here is a nice array of data on the subject. These posts range from October 2009 to the present and are presented oldest to newest in this list.

Local Radio Freeedom Act: You’ve Got Mail! – A letter to the Senate Majority and Minority leaders supporting radio by Sens. Blanche Lincoln (D-AR) and John Barrasso (R-WY), co-sponsors of the Senate version of the Local Radio Freedom Act (LRFA)

The Performance Rights Act: Endangering Diversity -The Media Institute, a nonprofit research foundation focusing on communications-oriented policy issues, has released a report in which they set forth their opposition to the Performance Rights Act (PRA).

Stop The Radio Tax! – In which I catalogue the online resources made available by our sponsors over at the NAB. There are some good tools, including efforts on Twitter and Facebook.

Chris Brown Sings the No Airplay Blues – As the RIAA decries the validity of radio’s promotional value, recording artist Chris Brown records an online audio plea to his fans to call radio stations and ask for his songs.

Performance Rights Act: Civil Rights Leaders Weigh In – Opponents of the PRA include civil rights luminaries such as the Rev. Al Sharpton, Dick Gregory, and Tom Joyner. In addition, 15 members of the Congressional Black Caucus have also expressed their concerns, including Elijah Cummings, Danny Davis, Al Green, John Lewis, Charlie Rangel, and Bobby Rush.

Performance Rights Act, A New Wrinkle – In which I offer commentary on the ripple effect of this legislation, particularly the renegotiating of artists contracts that I spoke of in my opening.

The Performance Rights Act is a very serious issue and it could still go one way or the other, so please educate yourself on the subject. Make an informed decision and let your Representative know your views!

The Performance Rights Act (PRA) has been a fairly constant topic here and on other radio-centric websites. The push for additional royalties it represents has a broad array of implications for broadcasters, labels, and artists.

Imagine my surprise, after writing extensively on the subject for so long, when I find a completely new and worrisome aspect of the legislation that had heretofore eluded me. I stumbled across this excellent analysis of the PRA debate by Stephen Koff , The Plain Dealer‘s Washington bureau chief, that was syndicated on Cleveland.com.

It covers things in a very even-handed fashion, but most importantly it gives us the following observation:

Meanwhile, Rex Glensy, a former entertainment lawyer who teaches at Drexel University’s law school, says a radio performance royalty could alter the dynamics of record contracts. If there’s money involved — especially more money for the artist than the label envisioned — it’s bound to happen, he says.

He uses the example of Barbra Streisand performing a Cole Porter song and releasing it on CBS Records. Right now, the only party getting radio royalties would be the estate of Cole Porter.

Under the recording industry proposal, Cole Porter’s heirs would still get their money, but additional revenue would go to Streisand and the record company.

“You know what will happen?” Glensy says. “All of a sudden Barbra Streisand is going to hear a knock at her door and see CBS saying, ‘We want to renegotiate your contract.'”

That’s the problem with changing anything related to copyright, Glensy says. It inevitably affects every other piece of the business.

I’m personally thunderstruck that I did not think of this earlier. As with most legislation, it is the cascade of secondary and tertiary effects that can wreak the most far reaching changes. I’m pretty sure that most of the artists supporting this misguided legislation are unaware that things could play out this way either.

Since its introduction, I have written extensively here about the Performance Rights Act (PRA). The PRA, sponsored in the House of Representatives by Rep. John Conyers, would require traditional radio stations to pay performance royalties as well as the ones that are already paid to the songwriter. On the surface it seems like a good idea, but examination reveals its flaws quite readily.

One of the most worrisome flaws being the effect that the legislation could have on minority-owned stations. Of course, like everything else pertaining to this act, there is viscous argument on the subject. Elliot Millner at BlackVoices hit on some excellent perspectives in his recent post on the subject:

The main beneficiary of the Performance Rights Act (if passed) would not be the recording artists whose music is being played; it would be the record labels, who would reap the benefits of most of the royalties collected, just as they receive the majority of the money from artists’ album sales. Also, the main beneficiaries of the Performance Rights Act not passing would not be black radio; it would be large broadcast radio corporations, both black-owned and others, which would escape having to compensate artists for using their music.

Despite the fact that the post contains an overall hostile stance towards large broadcasters, you’ll notice he agrees with my stance that the labels, not the artists, would be the primary beneficiaries of the PRA. I propose that this underscores the validity of my assertion.

He goes on to share his excoriating opinions of big broadcasters, but then at the end of the post comes a fascinating observation:

This is yet another unfortunate instance of divide and conquer: Instead of attacking the entities (record labels) that are whoring them both, radio broadcasters and artists have chosen to go to war with each other. Ultimately, the only winner in this drama will be the record companies, who will continue to prosper (relatively speaking) in tough times, while those that should be waging war against them continue to foolishly attack each other.

Now, I’ve often commented on the fact that it’s a shame that so many artists are unable to see how the labels are leveraging them. High-profile spokesmen are terrific for any cause. I had not, however, given consideration to the “divide and conquer” aspect of the struggle.

Despite our differing on a few things, I think that Mr. Millner and I agree on several aspects of the situation. Somehow I don’t think getting “played” by the labels will be as good for the artists as getting played on the radio has been.

When people think of civil rights issues, they tend to think of the obvious things: racial profiling, job discrimination, etc. In real life, things are rarely quite so neat. This is a truth that civil rights proponents are well aware of. Lately, many of the higher profile names in this arena have begun to cast their eyes upon the Performance Rights Act (PRA). Politic365 recently did a special report about this, leading off with this quote:

[…] as Rev. Al Sharpton told Politic365, “often it is the quiet bills, the obscure bills, the so-called “specialized” bills, the bills no one seems to know much about, that can hurt Black folks the most if we’re not paying attention.” A textbook example, according to Rev. Sharpton and other civil rights advocates interviewed byPolitic365, is the “Performance Royalty” legislation that many advocates believe would throw Black radio into a deep tailspin.

Anyone familiar with the ways of Washington is aware of the way that bills are often attached to higher priority legislation in order to pass. It is a daily occurrence on Capitol Hill. In addition, the impact of this legislation on minority-owned radio has long been a bone of contention, inspiring truly bipartisan efforts on both sides of the issue.

But now the heavy hitters from the civil rights scene are weighing in on the legislation and their thoughts on the PRA are not exactly complimentary. Here is another example drawn from the same report:

MMTC [Minority Media and Telecommunications Council] warns that “misinformation is circulating in the civil rights community suggesting that the legislation will not harm minority radio. In fact, black and Spanish radio would be hit the hardest by this legislation because these stations face the greatest challenges” – including weaker signals, advertising discrimination, and the FCC’s failure to enforce its equal employment opportunity rules. MMTC reports that it has conservatively estimated that the legislation would throw at least a third of minority owned stations over the cliff into bankruptcy. The National Association of Media Brokers (NAMB) agrees, adding that “the imposition of a performance royalty on free, over-the-air broadcast stations will be crippling to the broadcast industry in general, and be particularly devastating to minority broadcasters and their audiences, as well as to other new entrants to the industry.”

This is particularly distressing if you take into account the research findings referenced in the Politics365 special report. According to that report, the value of radio airplay directly translates to approximately $2 billion in annual music sales, and that number excludes radio’s promotional impact on concert and merchandise based income.

Opponents of the Performance Rights Act include civil rights luminaries such as the Rev. Al Sharpton, Dick Gregory, and Tom Joyner. In addition, fifteen members of the Congressional Black Caucus have also expressed their concerns, including Elijah Cummings, Danny Davis, Al Green, John Lewis, Charlie Rangel, and Bobby Rush. That is one impressive roll call if you ask me.

In the end, though, it was Rev. Sharpton who posed the vital question of the day:

“Why in the world would the Democrats at the Commerce Department do this to Black radio – and to radio period? It doesn’t make sense from a political, social or economic perspective. If it passes, this bill would have a devastating effect on Black communities.”

Everybody’s talking about Kagan. Elena Kagan, that is — President Obama’s new nominee for the U.S. Supreme Court. I have a feeling that the Recording Industry of America (RIAA) in particular will be paying attention due to her history on the subject of fair use, especially since this history includes the following (as reported by Eriq Gardner at The Hollywood Reporter):

Hollywood’s biggest worry about Kagan might be her philosophy on intellectual property matters. As dean of Harvard Law School from 2003 to 2009, she was instrumental in beefing up the school’s Berkman Center for Internet & Society by recruiting Lawrence Lessig and others who take a strongly liberal position on “fair use” in copyright disputes.

Most notably, during those years, Professor Charles Nesson at the Berkman Center represented accused file-sharer Joel Tenenbaum in the defense of a lawsuit by the RIAA. Professor Nesson led his cyberlaw class in alleging that “the RIAA is abusing law and the civil process” with excessive damage claims in piracy cases. It was Kagan herself who wrote a personal letter to the U.S. District Court to help certify the students.

That stance on fair use could be a distinct boon to the radio industry in the ongoing battle against the Performance Rights Act (PRA). Add in prior actions adversarial to the RIAA and you can see why they and their allies could well be nervous of her prospective position.

Ironically, the Obama administration later weighed in on the side of the RIAA in the case. But it was before Kagan was fully confirmed as U.S. Solicitor General. At the time, Professor Nesson expressed some doubts about whether Kagan would back the government’s amicus brief and also called her “enlightened” on these issues.

So, it is reasonable to have hope of her support if she makes it to the Supreme Court, especially in light of nearly a century of proven economic benefit shown to artists through free airplay. I would think the fair use argument stands on solid ground when that stance is taken.

Of course, her stance on other issues could complicate things for broadcasters, but I have not yet concluded my research in that regard. No matter what, it is worth carefully watching as she goes through the vetting process. If she does get the position, I would like to think that we would win back some ground.

If you are paying attention to the Performance Rights Act (PRA) as it winds through Congress, you are aware of the argument that free airplay is not of sufficient value to artists, hence the desire for more royalties. I can talk all I want about how silly I find that argument, but it looks like the court system in Texas is about to address that for me.

There is a rap artist in Houston called Trae tha Truth, and he is currently launching a lawsuit against RadioOne because they have banned his music. The rationale is that by doing so, they are hurting his career. The Houston Chronicle‘s blog has particulars:

I’m not here to comment on the right or wrong of the situation. What I find noteworthy is the approach being taken. This is a lawsuit based on loss of business and weakening of brand caused by a lack of free airplay, airplay that musicFIRST and the Recording Industry Association of America (RIAA) consistently devalue in their lobbying for the Performance Rights Act. That sounds suspiciously to me as thought the free airplay might just have value, that it might just be essential to the artist.

Don’t take my word for it, though. Let’s hear from Trae’s record label itself. If the airplay has no value they should be quite unruffled by the situation:

Rap-A-Lot Records’ CEO James Prince weighed in on the ban, saying that it also affected his business decisions with regards to Trae’s music. “I had been excited about being involved with the next Trae album,” says Prince, “but with this ban taking place, not only in his home town, but likely also in the second best place for airplay, which is Dallas, it would be impossible to promote the album. This ban is sabotaging his career, because those cities are the foundation for breaking his records.”

Wow. “Impossible to promote the album.” Strong words, especially from a record company exec. Could it be that airplay does have some intrinsic worth? “Sabotaging his career,” sounds to me like a bit of an impact.

I’m very curious to see if any of the pro-PRA groups out there will make any comment on this, or if we will simply hear silence and crickets.

Washington, D.C., is not a very straightforward place. Legislation is the result of deals, compromises, lobbyist influence, and many other factors. These find their way into law in the most roundabout ways at times. One standard approach is to take some piece of legislation — in this case the odious Performance Rights Act (PRA) — and attach it to some “must pass” measure up for vote. That way, its native popularity level has nothing to do with it being enacted. It happens all the time.

Enter Ben Nelson (D- NE), who chairs the Legislative Subcommittee, which oversees the Copyright Royalty Board (CRB). The CRB is the organization that would administrate PRA if it gets passed. The excellent thing is that he is on our side of the fight.

As RadioBusinessReport notes, he made mention of the PRA in a recent address about the CRB’s budget for 2011:

“As a brief aside, I continue to hear from a number of organizations concerned about the performance royalties bill that would affect local radio stations,” said Nelson. “I make this brief note here only because of the Copyright Royalty Board’s potential role under this legislation. Along with many of my colleagues I continue to oppose this bill and would not support an attempt to attach such legislation to an appropriations bill whether it is this one or any of the others.”

This is a step in the right direction! Having someone in the right position to prevent the classic political sleight of hand is something that I find reassuring. Having grown up in family of lawyers, I have seen all to well the winding path taken by even the most innocuous legislation.

Support for the Local Radio Freedom Act, which opposes the proposed royalty structures, is one of the only true bipartisan efforts on Capitol Hill, or at least in the House of Representatives. Too many remain off the record in the Senate to have a clear idea of where things stand with them. Nelson’s stance in keeping that back door shut will hopefully make the ongoing battle in the Senate a more straightforward and honest one.

As usual every few days, it is now time to cast a jaundiced eye on that misguided piece of legislation called The Performance Rights Act. [If you missed it, the PRA is an attempt to add a royalty for performers to the royalties already paid to ASCAP and others by broadcast radio. Search the blog and you’ll find numerous postings on the subject.]

Today, National Association of Broadcasters (NAB) CEO Gordon Brown takes the battle to The Washington Post where he enumerates the flaws in this legislation, many of which I’m happy to see coincide with my own.

He starts off with one of my particular gripes — the fact that half of this money, touted as going to the artists, actually goes straight into the pockets of the record labels. For those of you paying attention to economic pattern displayed here, that means that most of it is leaving the country immediately. That’s not what sets my teeth on edge, though.

What about the rest of the money? That goes to the artists, right? Not necessarily:

With 50 percent in the labels’ pocket, the remaining money would be divvied up by SoundExchange, an organization launched by the RIAA to collect and dispense royalty payments to artists. The disbursement would be split 45 percent for the featured artist and 5 percent for the background musicians — if SoundExchange can locate them. But given media reports that SoundExchange had trouble finding the Mormon Tabernacle Choir, the location loophole seems to be a rather big “if.”

And there we have my biggest issue with all of this, paying the artists is the job of the record labels — one they do not have a history of being good at.

The record label claim that this legislation is about “fairness to artists” is dubious. D.C. native Herb Feemster of Peaches & Herb” fame — as well as artists ranging from Benny Goodman to Pink Floyd to Cher — had to file lawsuits against their record labels to recoup unpaid royalties.

Contrast the record label exploitation of artists with that of radio stations that advance the careers of musicians with free airplay and concert promotions. With a growing audience of 239 million weekly listeners, free and local radio remains an unparalleled promotional platform for music, generating untold billions in album and concert sales and merchandising opportunities.

You see, I’m in my mid-forties. I remember in my high school and collegiate years it seems like there was always a battle between some artist who had not gotten paid and his label. The Jimi Hendrix estate went through all kinds of absurdity over issues like that. Never once, then or when I was producing shows, did I hear anyone complaining about radio unless it was because they were not on it.

I’ve been an activist on behalf of artists for a long time now, as most people in New Orleans can attest, and as such, it pains me to see the RIAA preaching concern for their artists as a smokescreen for efforts to shore up their failing business model. Just because they are on the ropes in the post-Napster / iTunes age does not mean that our industry should be jeopardized to pay their bills.

If by some strange chance you are unfamiliar with the Performance Rights Act (PRA), just use the search box in the sidebar. I’ll wait here.

It’s been trudging through Congress for a while now and if passed, could spell huge trouble for the radio industry. The thing that is really unique about it is that both the support and the opposition to it are truly bipartisan.

That’s right. I said bipartisan. One of the only instances in modern politics where you are equally likely to find a Republican as a Democrat on either side. Case in point: liberal blogger Wonkette taking Nancy Pelosi to task for supporting this ugly piece of legislation:

Pelosi went to some “advocacy event” hosted by the Recording Academy — makers of the televised witchcraft spectacle the Grammy Awards — to talk about this thing called the Performance Rights Act, which would make radio stations pay some sort of compensation for that musical stuff they play. She said there’s an “army of advocates” in Congress who are working extra-hard to pass this socialists-for-vocalists scheme, because they nothing better to do. Where is America’s “army,” of freedom?

The radio stations are not down with this pro-welfare initiative at all! Because they are already doing enough for Ke$ha and these other music losers by promoting them all the time, for free.

Harsh words, but that is what she is known for. The important thing here is that this is not the standard pattern of modern politics with Left going after Right and vice-versa. No. Rather, it is an illustration of the fact that this argument is more basic than party loyalties.

While I don’t agree with Wonkette’s classification of musicians as “music losers,” I do thank her for her support. This issue needs more exposure to the general public, and I think that all of us in the industry are thankful for every blogger and every journalist that takes our cause to the public. After all, it is the public that can make a difference by making their opinions known to their representatives.

At first I had hopes because of the date, April 1, that this was a prank. Unfortunately, in the clear light of the following day it is indeed legitimate. What I’m referring to is the letter from the Commerce Department’s general counsel expressing White House support for the Performance Rights Act (PRA). Not cheerful news for stations, although the battle is not lost yet.

The National Association of Broadcasters (NAB), our sponsors, responded in short order with this statement made by EVP Dennis Wharton (text from AllRadioNews):

“NAB was aware this letter was coming, which is a position taken previously by the Bush Commerce Department. We’re disappointed the Commerce Department would embrace legislation that would kill jobs in the U.S. and send hundreds of millions of dollars to foreign record labels that have historically exploited artists whose careers were nurtured by American radio stations. The good news is that 260 members of the House of Representatives and 27 U.S. Senators are standing with hometown radio stations and against the RIAA.”

While this represents a setback, it does not mean our cause is lost. The news that those in favor represent a rare bipartisan coalition in Congress is balanced out by the fact that those against are also a completely bipartisan group. This issue is not a simple in which party loyalties factor, oddly enough.

I really think the best argument against this legislation is a simple look at the history of radio payola, an opinion shared by Nate Anderson at Ars Technica:

[…] the NAB (correctly) points out that it has been the broadcasters who repeatedly engaged in “payola” over the years; not only has radio paid nothing to the recording industry, but the industry has gone to the trouble of paying extra to radio, just for the privilege of promoting particular songs.

Just for the record, I do agree that all broadcasters should be paying the same royalties regardless of delivery mechanism. In my opinion, that means webcasters and satellite should be paying royalties structured like radio enjoys now rather than increasing radio’s burden to match theirs.